South African poultry group targets U.S. import quota

JOHANNESBURG (Reuters) - The South African Poultry Association (SAPA) has filed a lawsuit seeking to force the government to suspend a quota that excludes some U.S. poultry imports from an anti-dumping tariff, a senior official with the association said on Tuesday.

A local resident carries her purchases of vegetables and poultry from a makeshift market near Qunu, in the Eastern Cape Province December 11, 2013. REUTERS/Adrees Latif

If successful, the move - a response to the Trump administration’s decision to impose tariffs on aluminum and steel imports - could put at risk duty-free access to the U.S. market for nearly $2 billion worth of South African exports.

“We’ve pulled the trigger,” Marthinus Stander, chairman of SAPA’s broiler organization, told Reuters, referring to the legal action the association had threatened for more than a month.

South African Trade and Industry Minister Rob Davies acknowledged that the government had received the court papers relating to the lawsuit from the poultry group but declined to comment further.

South Africa levies a tariff on so-called “bone-in” poultry that it says is exported by major world producers, including the United States, at prices below the cost of production.

But in 2015 the South African government agreed to a quota that allows some 65,000 tonnes of meat from U.S. producers to be imported tariff-free each year into South Africa.

South Africa agreed to the deal to preserve its benefits under AGOA - the United States’ flagship trade legislation for Africa - which grants qualifying countries duty-free access to the U.S. market for thousands of goods.

In 2017, more than $1.8 billion in South African exports, including some now subject to tariffs of 25 percent on steel and 10 percent on aluminum imposed by Washington earlier this year, were covered by AGOA.

The South African government has tried unsuccessfully to persuade the Trump administration to grant it an exclusion from the new tariffs.

The poultry producers association says the U.S. tariffs violate the agreement on the poultry quota.

“The quota should be suspended if any of the benefits that South Africa enjoyed at the time of the renewal of AGOA are suspended. This has happened to steel and aluminum which used to be duty free under AGOA,” Stander said.

Others oppose SAPA’s position.

South African meat importers argue that ditching the tariff-free quota would drive up prices for the country’s consumers and likely provoke retaliation by the U.S. poultry industry.

“I don’t think they’re going to take it sitting down,” said David Wolpert, CEO of South African meat importers association AMIE SA, referring to U.S. poultry producers. “I think they will lobby Congress immediately to take reciprocal action ... There can be a domino effect.”